Unemployment remains steady as population loss from interstate migration abates
Labour market performance, population growth, house prices, and business and consumer confidence are all featured in our latest review of South Australian economic data releases.
Employment and unemployment levels remain steady
Total employment in South Australia continued its flat trend in February 2019, and has shown no material change for 10 months now, according to Australian Bureau of Statistics’ Labour Force Survey data released today.
Trend employment fell by 200 persons in February while the number of unemployed people remained unchanged at 53,000 persons. As a consequence, South Australia’s trend unemployment rate remained steady at 5.9 per cent, which is unchanged from a year earlier. Similarly, the state’s employment to population ratio remained unmoved in February (58.9 per cent).
South Australia’s underutilisation rate – those persons who are unemployed or underemployed expressed as a proportion of the labour force – was 14.7 per cent in February, down from 15.5 per cent a year ago. While the state’s underemployment rate has improved considerably from its previous peak of 18.0 per cent in late 2015, it remains elevated compared to both its level from a decade earlier (11.6 per cent) and underemployment nationally (13.1 per cent).
South Australia’s trend unemployment rate of 5.9 per cent was moderately above the national unemployment rate of 5.0 per cent, which was unchanged from January. Unemployment rates held steady across most states and territories.
Population losses from internal migration have declined
Population growth in South Australia has been held back by elevated levels of interstate migration outflows over recent years. Preliminary population estimates from the ABS provide a welcome sign that this trend is now abating. The state lost 761 people through net ‘internal migration’ in the September quarter of 2018, which compares with a net loss of 1,304 people a year earlier, and is the smallest internal migration loss since the June quarter of 2014.
One the notable aspects of recent demographic patterns for the state is the degree to which population growth has become dependent on overseas migration, with gains from natural increase being offset by losses via net internal migration. In the year to September 2018, natural increase (i.e. births less deaths) added 5,111 people to the state’s population, whereas the state lost 4,608 people through interstate migration. In comparison, the contribution from overseas migration was estimated to be 13,153 people.
South Australian total population rose by 0.8 per cent through the year to the September quarter 2018. In comparison, Australia’s population rose by 1.6 per cent over this period.
Adelaide house price growth stalls as national decline accelerates
The nation-wide downturn in residential property prices accelerated during the December quarter of 2018. The ABS Residential Property Price Index for the eight capital cities fell by 2.4 per cent following a 1.5 per cent contraction in the September quarter.
The latest quarterly decline was broadly based, with residential property prices falling in all states and territories except Adelaide and Hobart. However, house price growth for Adelaide has now slowed to a standstill, from 0.6 per cent in the September quarter to just 0.1 per cent in the December quarter.
Through the year, home prices for the eight capital cities fell by 5.1 per cent. The largest falls were recorded in Sydney (down 7.8 per cent), Melbourne (down 6.4 per cent) and Darwin (down 3.5 per cent), whereas prices rose strongly in Hobart (up 9.5 per cent). Adelaide home prices registered a modest rise of 1.5 per cent over this period.
Divergent outcomes for South Australian business and consumer confidence
The latest BankSA State Monitor reveals that business confidence has slipped since October, but remains at a high level compared to the average levels recorded over the past seven years.
South Australian businesses recorded positive movements across four measures of sentiment, including their own overall current business situation and perception that small business activity is picking up. Of the six measures that recorded negative movements, the creation of additional employment in the last three months and a decreased intention to create new employment in the next three months were notable inclusions.
In contrast to businesses, consumer confidence remains quite subdued. The consumer confidence index decreased by 4.4 points to 101.9 points in the February survey, which represents a 3.9 per cent decline from the average level recorded in 2018. Consumer confidence has been at a subdued level for eight years now, and is 11 per cent below its long-run average level.